Giving Women Credit

Nancy Dreier knew her dog-grooming business would be a cut-and-dried winner, because dogs don't come to Dreier's salon. She takes the salon to them. Everything she needs — from combs to hot water — she takes with her in a van that she drives to clients' homes.

"This is my home away from home," Dreier says proudly.

She had everything she needed to make her business successful — everything, that is, except money. Back when she started this business, banks said no to giving her a loan, CBS News Correspondent Wyatt Andrews reports.

"It's humiliating," Dreier says of the loan rejections. "I was mortified."

Then, Nancy's mom found a unique site on the Internet. The web site was It's a new, nonprofit loan fund, set up specifically to loan money online to women business owners such as Dreier.

A New Loan Formula
If you're a woman or minority business owner looking for a loan, consider:
  •, a company formed by women to help female business owners get loans banks won't give them.
  • The Small Business Administration, a government agency created to help small businesses.

  • "There's a real need there," says Nell Merlino.

    Merlino, who seven years ago dreamed up Take Our Daughters To Work Day, has a new mission now as the site's co-founder. She says small businesses run by women are critical to the new economy and that banks are missing the party.

    "Women are out there by the millions running business. We employ 27 million people and it's still hard for us to get money," Merlino says.

    Merlino says the current system of rating credit, where borrowers are scored positive or negative largely on their payment record, doesn't work for today's small businesses.

    Worse, she says, it's unfair to minorities and women.

    "I mean, there are women who, say, have gone through a bad divorce and their credit report looks really messed up, so they don't even get past the first step 'cause the bank just kicks it out," said Merlino.

    So, the credit scoring team at is testing a new system. The difference is in the application.

    As credit director Kathy Keeley oints out, where a bank application asks, "How long have you owned your business?," asks, "How long have made your product or service?"

    "I'm betting everything that this system is better," Keeley says.

    "If I know if you can make or sell and product, I know you can generate revenue," Keeley says. "If I know you own a business, what does that tell me?"

    "We view ourselves as a living laboratory, to really once and for all figure this out," Merlino says.

    It certainly worked for Nancy Dreier. She got her loan based on two years' experience grooming dogs.

    "It was very uplifting," Dreier says. "It was like, 'Yahoo, I got it!'"

    Now what she's got is a huge success, and the banks are watching to see if this system of granting credit pays off — watching as Dreier drives her four wheeled beauty parlor to her growing list of four-legged clients.

    ©2000, CBS Worldwide Inc., All Rights Reserved